Currency ups and downs in recent months

Since Donald Trump's victory in the 2024 U.S. presidential election, the euro has experienced significant fluctuations against both the U.S. dollar and the British pound, influenced by shifting trade policies, investor sentiment, and macroeconomic factors.

Initial Market Reaction: Euro Weakens Amid Dollar Surge

Immediately following Trump's election win in November 2024, the euro depreciated sharply against the U.S. dollar. The EUR/USD pair dropped below 1.0700, marking its lowest point in four months. This decline was driven by expectations of expansionary U.S. fiscal policies, including tax cuts and increased tariffs, which were anticipated to boost U.S. growth and inflation, thereby strengthening the dollar .

Simultaneously, the euro weakened against the British pound. The GBP/EUR exchange rate rose to approximately €1.2004, as the pound gained ground due to the euro's vulnerability to potential U.S. trade policies .

Mid-2025: Euro Rebounds as Dollar Weakens

By mid-2025, the euro began to recover against the dollar. On May 26, 2025, the euro rose to $1.1418, its highest level since April 30. This appreciation followed President Trump's decision to postpone the implementation of a proposed 50% tariff on European Union imports, alleviating immediate trade tensions and reducing demand for the safe-haven dollar .

The euro's resurgence was also supported by growing concerns over the U.S. fiscal outlook. Trump's proposed tax bill, projected to increase U.S. debt by $3.8 trillion over the next decade, raised investor apprehension about the dollar's stability, further contributing to its decline .

Euro-Sterling Dynamics: Pound Strengthens Amid Euro Volatility

The British pound has shown resilience against the euro in 2025. As of May 26, 2025, sterling reached its highest level since early 2022, appreciating to $1.3558. This strength is attributed to sustained UK inflation and economic stability, which have tempered expectations of aggressive rate cuts by the Bank of England .

Reuters

In contrast, the euro's performance against the pound has been more volatile, influenced by the eurozone's exposure to global trade tensions and the European Central Bank's dovish stance in response to economic uncertainties.

Outlook: Continued Volatility Amid Policy Uncertainty

Looking ahead, the euro's trajectory against both the dollar and the pound will likely remain influenced by ongoing trade negotiations, fiscal policies, and central bank decisions. Investors will closely monitor developments in U.S.-EU trade relations, the implementation of U.S. fiscal policies, and the European Central Bank's monetary policy responses to navigate the evolving currency landscape.

So what does this mean when buying your dream home?

When buying a property you are usually dealing in some of the biggest amounts of money you ever deal in in day to day life. You see a property, you agree on a price and you pay a deposit, but between deposit and final signing could be 3, 4 or even 6 months. In that time you could see the value of your money decrease against the Euro, there are ways to hold the value of your money on the exchanges, but you need to be working with a professional currency exchange company.

Get the currency guide here...